The Great Recession caused labor market devastation on a scale not seen for many decades. Millions of jobs were lost in the United States during 2008 and 2009, leaving the labor market with a hard road to recovery. Indeed, that recovery has required many years of job growth, and it was only in April 2014 that total employment reached its pre-recession level. However, this milestone did not mark a return to pre-recession labor market conditions. Because the U.S. population is growing, simply reaching the previous number of jobs is not sufficient to return to pre-recession employment rates.
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The Great Recession caused labor market devastation on a scale not seen for many decades. Millions of jobs were lost in the United States during 2008 and 2009, leaving the labor market with a hard road to recovery. Indeed, that recovery has required many years of job growth, and it was only in April 2014 that total employment reached its pre-recession level. However, this milestone did not mark a return to pre-recession labor market conditions. Because the U.S. population is growing, simply reaching the previous number of jobs is not sufficient to return to pre-recession employment rates.
In order to accurately track the progress of the labor market recovery, The Hamilton Project developed a measure of labor market health - the 'jobs gap' - that reflects changes in both the level and the demographic composition of the U.S. population. Beginning in May of 2010, The Hamilton Project has calculated the number of jobs needed to return to the national employment rate prior to the Great Recession, accounting for population growth and aging. With today's employment report, we can report that the national jobs gap relative to November 2007 has closed. This indicates that, by our calculations, nearly a full decade after the start of the recession, employment has returned to its demographically adjusted pre-recession level. This does not mean that all harm to the labor market resulting from the Great Recession has dissipated, nor that the economy is at full employment. It does mean, though, that the economy has added enough jobs to make up for the losses during the Great Recession.
Edited excerpts from publication.
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